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Baroness Hollis of Heigham: I shall respond to the voices around the Chamber tonight! Amendment No. 185 seeks to remove the rent restriction rule--the single room rent--which applies to most young people under 25 years of age living in the deregulated private rented sector.

Perhaps I may respond to the noble Earl's point about income support. We believe that income support is what people should live on. Housing benefit should be available to meet housing bills of a reasonable level as defined by the rent officer. The noble Earl asked whether there was any expectation that income support should be asked to pay housing bills. I take it that he was not saying that he would not consider any possible suggestion that one might embed into income support an additional allowance to cover part of the housing bill with some element of discretion. That is one of the proposals being floated in discussions. The noble Earl's point was that if any such housing benefit were to be embedded into income support, it must be additional to, and not eating into, current levels of income support. It is a view which he and I have expressed over the years.

The single room rent restriction was not of our making. I do not want to give the impression that it was a success or without fault. The available research, some of which was quoted by the noble Earl, is clear on that. We undertook to keep the single room rent restriction under review when we came to office. We acted swiftly to remove its extension--I think that it would have been dire and monstrous--to single people under the age of 60. It would have produced a situation where a widow, for example, was required to go into a house without even self-contained accommodation.

The noble Earl made reference to the bulk of research evidence which suggests among other things that young people are placed at a disadvantage when seeking to rent accommodation because landlords feel that they will be unable to pay the rent if they are dependent on housing benefit. Let me reassure the noble Earl that we have considered carefully all the research evidence so far available. We understand the concerns but we need to look at the range of options so that people claiming HB are not in a better position than those who have to pay the rent from their own resources.

The noble Earl's amendment would run contrary to this. For example, under the noble Earl's amendment, a single young person who is unemployed would be able to claim housing benefit for a one-bedroomed flat

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whereas someone on modest wages would be unlikely to afford such accommodation and would almost certainly be sharing accommodation in that situation. I do not think that it is unreasonable to expect young people to share accommodation provided that they are not particularly vulnerable or have special needs--for example, those who are care leavers, the severely disabled or the like. I do not think that it is unreasonable that young people should share accommodation.

My difficulty is that local authorities have discretion with government funding--it is a matter I have raised previously with the noble Earl--to provide additional financial help with rent to those who are in most need. For example, they could exercise their discretion if they chose to help those they believe should live in independent accommodation. To my distress, many authorities are simply not spending anywhere near the money allocated to them by central government. We want to encourage them to do so, and have recently issued revised guidance to explain the nature and intent of the discretionary scheme.

We have the exceptional hardship scheme but at present, although government are allocating nearly £20 million a year, only £8 million or so of that money is being taken up by local authorities. While Hillingdon is spending virtually every pound allocated to it by government to meet the problems, some of which have been outlined by noble Lords, Hackney is spending only a tenth of its allocation. While Stoke-on-Trent is spending well above its allocation, Blackburn is spending only a sixth of it. Leicester and Stratford-on-Avon are spending all of their allocation aimed to help to meet the problems of hardship under housing benefit restrictions whereas my own authority, Norwich, is spending only a fifth of it; and Oxford is spending not a penny. I know that that is a high rental area because my family lives there and I have to help with the rent. Yet local authorities are not taking advantage of a government scheme designed to help people in such need.

11.15 p.m.

Lord Goodhart: I am grateful to the Minister for giving way. Perhaps she will find that the change of control that recently took place in the Oxford City Council may lead to a different outcome.

Baroness Hollis of Heigham: Even more that the dissemination of useful information in your Lordships' House will have all authorities, irrespective of party colour, taking advantage of additional resources placed by government to allow them to meet the need.

I have studied the figures and there is no rhyme or reason why of two authorities in adjacent areas one will spend not a penny of the allocation while the other will spend every penny. It is entirely discretionary, but it seemed to us the proper way to respond to the problem in the interim period before we finally determined in the light of the consultation exercise how we take the Green Paper forward.

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We inherited a problem. We responded by making our discretionary hardship scheme more generous. Local authorities have not availed themselves of that money, even though it was meant to be bridging finance until the Government's proposals have been formulated in the light of response to the housing Green Paper. The money is available to local authorities, but they are not using it. I hope that with your Lordships' help they will.

Instead of going down the route proposed by the noble Earl, Lord Russell, we have suggested in the housing Green Paper that one option to overcome the barrier to young people obtaining accommodation is to broaden the definition of the single room rent so that it includes a range of rents for shared accommodation--shared houses, flats and bedsits--instead of the current definition which limits it to the average rent for one room which is not self- contained. We need to understand how that will work in practice, which is why we are seeking views. We also need to understand how landlords will react to the situation and whether the option will provide young people with accommodation at an affordable price, giving them the security and decency of accommodation they need in order to take up employment.

The Green Paper has raised a range of issues. We are considering the responses and reach our decision in the light of those. In the meantime, we have made available the bridging finance in order to overcome some of the hardships caused. I hope that the noble Earl will understand that I cannot give firm commitments beyond that, except to say that we are looking carefully at the responses to the housing Green Paper and we take the research very seriously, as he would expect. I hope that in the light of my comments the noble Earl will feel able to withdraw his amendments.

The Lord Bishop of Hereford: Perhaps I may ask the Minister to clarify the discretionary money. I understand that care leavers are exempt from a single rent restriction up to the age of 22. They are deemed to be vulnerable and may well need self-contained accommodation. However, between the ages of 22 and 25 no such protection is provided, except presumably the discretionary money at the disposal of local authorities. What happens to those local authorities which are spending all the discretionary money but in which vulnerable care leavers may be in that position and for whom no money is available? Is it possible that some specific exclusion may be made for vulnerable care leavers between the ages of 22 and 25?

Baroness Hollis of Heigham: That is a point well taken. I have all the figures from local authorities and see that those which are spending every penny from the exceptional hardship scheme are few. The total expenditure is about 40 per cent across the country. Therefore, almost all local authorities have head space to meet the need which exemplifies the groups for whom the money was intended.

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Last year we sent out a circular on housing and council tax benefit, A35/99, because we were worried about local authorities failing to take up the resource. It clarified the conditions that must be satisfied: for example, housing benefit must be calculated under the local reference rent or single room rent rules; there must be a shortfall between that and the maximum rent; there must be some housing benefit payable to him; and he would suffer exceptional hardship. However, it goes on to state that "exceptional" should be taken to mean "out of the ordinary". Paragraph 10 states:

    "That is not the same as 'very unusual' and criteria cannot be set that can only rarely be met. Nor should a claimant be ruled out because someone in similar circumstances would suffer similar hardship. That could mean that both of them would be in exceptional hardship".

Paragraph 12 states that local authorities must consider each case individually and should not devise groups of claimants who, by their very nature, experience hardship. A young person, for example, with special dietary needs may be unable to cut back on essential expenditure in quite the same way and should not be refused such a scheme. In other words, first, there is head space for most local authorities to meet the needs. Secondly, the Government were at great pains to say that "exceptional" should be unusual; that is, not so rare that it never happens, but simply "not normal".

Therefore, one would never say that all students, by virtue of being students, would suffer hardship and thus would be eligible. However, one could say that a student with, for example, a physical disability or a problem with access or who needed extra heating or whatever, might very well be deemed by the local authority to come within this qualification. I am concerned by the fact that the resource was put in place through recognition by government that hardship could be created because of the operation of the single room rent, yet local authorities have not availed themselves of it while we consider our way forward on the responses to the housing Green Paper.

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